Australia Post’s community service obligations (CSOs) are set out in s27 of the Australian Postal Corporation Act 1989 (APC Act) which requires that:

• the corporation provide a letter service for both domestic and international letter traffic
• the service be available at a single uniform rate within Australia for standard letters
• the service be reasonably accessible to all Australians wherever they reside
• the performance standards for the service reasonably meet the social, industrial and commercial needs of the community.Performance standards

Regulations made under s28C of the APC Act detail the particular standards required to meet these obligations. Performance against these standards is subject to independent audit by the Australian National Audit Office (ANAO).

All of the prescribed standards were met or exceeded in 2018/19. The actual result for each standard is outlined in the table below. The associated ANAO Audit Report is reproduced on pages 139 to 140.

Organisational arrangements
Australia Post considers the strategies and policies it has in place to carry out its community service obligations are appropriate and adequate. The ongoing focus on CSO compliance is maintained within the office of the Corporate Secretary.

CSO costs
There is a financial cost associated with meeting CSOs. Australia Post is required to provide certain products to customers at a uniform price but costs can vary considerably, primarily as a result of the higher operational unit costs to service more remote destinations.

Working in collaboration with our Shareholder, in 2018 we updated the methodology and approach to calculating the cost of the CSO. Key changes were to:

• capture a fuller range of costs to determine loss making destinations;
• include all international products mandated under the Universal Postal Union, in addition to reserved products; and
• provide greater transparency of the distribution of this cost to the Australian community.

Under this new methodology, the cost of providing the CSO for 2018/19 is estimated at $392.2 million (2017/18: $403.5 million), including $187.4 million in rural and remote locations (2017/18: $191.8 million).